Why You Don’t Need A Budget to Save Money

By Chonce Maddox
April 23, 2018

It’s no secret that most Americans could use a little help in the savings department. According to a recent survey, some 20% of Americans still aren’t saving money. More than half of Americans don’t have enough to cover a $1,000 emergency.

Worse yet, not saving money can put you in a dangerous financial situation as you won’t have a cash cushion to rely on if unexpected expenses arise or if you need to make a big purchase. Instead, you may have to take on more debt to cover your costs.

So how can you start saving money right now? Generally, the first piece of advice you’ll get is to create a budget. But, budgeting can be difficult, especially if you have trouble sticking to your spending plan. Nevertheless, it is important to know where your money is going so you can begin to save.

If you’ve struggled when it comes to sticking to a strict budget, never fear. You can still save money. To get going, take a look at our top suggestions for saving money without a budget.

Commit to Saving a Percentage

If you want to save without having a budget, you’re going to have to commit to it. A good way to do this is to save a percentage of your income regularly.

You may have heard of the 50/30/20 rule. This is when you split up your spending into three main categories instead of keeping up with dozens of smaller budget categories. According to the 50/30/20 rule, you’ll divide up your income so that 50% of it covers living expenses like housing, bills and transportation. Another 30% will cover discretionary spending, like your entertainment, dining out and gym memberships. The remaining 20% will cover savings and debt payments.

You can even switch the percentages around and choose to save 30% of your income and leave 20% for discretionary spending. Or, you can simplify it even further and save 20% of your income while spending the remaining 80% on regular monthly expenses.

Whatever allocation you choose, this is a simplistic way to manage your money and ensure you are maintaining a solid savings commitment.

Pay Yourself First

Paying yourself first is one of the easiest ways to start saving regularly. When you usually get paid, what do you spend your money on first? Is it groceries? Entertainment? Bills?

What if you treated saving money like a bill and put some cash aside into a savings account each time you got paid? You’d be setting aside money for your short and long-term financial goals early on in the month and hopefully reduce your financial stress.

If you have a 9 to 5 job, you can even consider asking your employer to deduct a specific amount from your paycheck and contribute it to a savings account. This way, when your paycheck hits your account, the deduction is already made and you don’t have to worry about budgeting for savings. Also, if you have access to a 401(k) through your employer, you can contribute pre-tax dollars to your retirement account before your income even hits your account.

Make It Automatic

Automating your finances has become a popular way to manage your money without even thinking about it.

Thanks to today’s technology, it’s easy to set up your bank account to automatically do specific tasks for you, like pay your bills or transfer funds. For example, making automatic payments to your utility bill provider can eliminate late or missed payments.

When it comes to saving money, automation works in much the same way. If you don’t want to miss paying your ‘savings bill’, set up an automatic and recurring payment as often as you’d like. You can even open a bank account at a financial institution dedicated to helping you save money.

If you open an account at Chime, for example, you can enroll in Chime’s Automatic Savings program. You can also take advantage of Chime’s Save When I Get Paid feature, which allows you to automatically transfer a percentage of your paycheck to your savings account. There’s also a Save When You Spend feature that rounds up each transaction you make with your Chime debit card to the nearest dollar. This amount is then transferred to your Chime Savings account. With this option, every time you spend, you’ll save effortlessly.

Get a Side Hustle and Save All the Money

Are you able to live a pretty comfortable life with your current income? You can always try to increase your income with a side hustle so that you can save more money.

For example, if you’re able to start a side gig making a few hundred dollars per month, you can take all your earnings from that side hustle and deposit it directly into a savings account.

Avoid lifestyle inflation

When I started earning more money after college, one of the best things I did was maintain my college student lifestyle. This way I could save the extra money I was making – as if it were never there. This allowed me to build up an emergency fund quickly and pay for my dream wedding in cash. I also paid off $30,000 of debt in just under three years. Yes, avoiding lifestyle inflation may involve some sacrifices, but if you view the extra money in terms of money designated for savings, you’ll be on your way to achieving your financial goals.

You can do it

Although a budget helps many people save more money, it isn’t always required. If a budget hasn’t worked for you in the past, try using the five methods above to jumpstart your savings account and get a leg up today on your financial future.

Choncé is a Certified Financial Education Instructor, personal finance freelance writer, and blogger who focuses on helping other manage their money better in order to live a life with more possibilities and fewer limitations. Her work has been featured on Business Insider, LendingTree, Credit Sesame, Barclaycard.

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